One chart shows why 2017 is going to be a tough year for the British economy

Britain's Chancellor of the Exchequer Philip Hammond leaves Downing Street in London, Britain, March 15, 2017. REUTERS/Toby Melville Reuters / Toby Melville LONDON — Britain's economy is in for a rough ride over the course of 2017, as the consumer spending that has driven the country's growth for year dries up.

The chart, which shows the composition of economic growth in the UK over the last six years, illustrates just how reliant the economy has been on domestic consumption (the light blue bar): S&P Global If consumers stop spending — and signs suggest they are already starting to spend less is — economic growth will likely suffer as a result.

"The Q1 2017 result of 0.3% was in line with this forecast. Although there are signs of some rebalancing of economic activity toward external trade, the UK for now remains a consumer-led economy; hence consumer spending will be a key driver of growth in 2017 and beyond, even though it will likely slow as higher inflation — expected to average 2.6% this year — squeezes household budgets."

"In its February projections, the MPC expected that this tension between consumer strength and relative financial market pessimism would be reduced over the course of this year. That process has now begun. With wage growth moderating and inflation picking up, both household spending and GDP growth have slowed markedly."